Velocity Composites : Investor Presentation FY24

About this update from Velocity Composites Plc

Full Year Results For the Financial Year Ended 31 October 2024 INVESTOR PRESENTATION Presentation Team Andy Beaden Non-Executive Chairman Andy has over 30 years' experience in finance, technology and manufacturing. A Chartered Accountant and economist by training, originally with KPMG and also having worked for two FTSE 100 companies, he is also a Fellow of the RSA (Royal Society for the encouragement of the Arts, Manufactures and Commerce). He was the CFO of the multi-sector material science business Luxfer, leading a secondary buyout in 2007 and then listing it on the NYSE in 2012. He also co-founded and is Chairman of IN4.0 Group, a digital technology consultancy and training business and largest provider of AWS training bootcamps in the UK. Jon Bridges CEO Jon co-founded Velocity Composites in 2007. Jonathan has over 32 years' experience within the advanced composites industry and is an experienced composite engineer. Previously, Jon was an Aerospace and Lean Solutions Specialist at Cytec Process Materials where he was responsible for direct sales support of UK and European based clients. From 2003 to 2005 Jon was a Manufacturing Engineer for Safran Nacelles where he was responsible for the manufacturing function for a growing, highly loaded aerospace unit supplying multiple assembly lines. Jon has a BSc in Materials Science from Coventry University and is a Director of the North West Aerospace Alliance. Rob Smith CFO Rob is a chartered management accountant with significant experience in leadership roles in a number of AIM quoted technology companies, where he has been instrumental in leading growth strategies and improving operational efficiencies. Rob has a proven track record in advanced manufacturing at both CFO and CEO level, including manufacturing systems implementation and international commercial leadership. Most recently Rob served as Group CFO at Biome Technologies plc and prior to that, in the CFO and CEO roles at Filtronic plc between 2014 and 2020, an electronics designer and manufacturer of advanced filters, antennas and transceivers. © Velocity Composites plc - 2025 | www.velocity-composites.com 3 FY24 Financial Highlights Revenue Gross Margin % Adjusted EBITDA* £23m 25.9% £0.4m FY23 £16.4m FY23 18.8% FY23 £(1.6)m Cash at Bank Operating Loss £1.7m £(0.9)m FY23 £3.2m FY23 £(2.8)m © Velocity Composites plc - 2025 | www.velocity-composites.com * Earnings before interest, tax, depreciation, 4 amortisation and adjusted for share-based payments. Aerospace Industry | 2024 Review - 2025 Expectations 2024 Review Well reported issues with Boeing Commercial Aircraft, due to Labour strike in US and quality issues with key suppliers, leading to re-acquisition of Spirit Aerosystems (aerospace industry's largest Tier 1) Spirit re-acquisition processes also had impact on Airbus, given OEM's need to protect IP and carve- out business from within Spirit & Boeing deal Potential US customers impacted by delays in Boeing production rates (B737-MAX and B787) due to increased scrutiny of any process changes by OEM quality teams - pressure on OEM resources Wider (non-composite) supply chain struggling to enable Airbus deliveries on A350 programme, however 2024 Airbus orders grew significantly for A350 programme (142 aircraft) identifying long-term strength & ramp-up Outlook for 2025 Spirit Aerosystems re-acquisition expected to complete mid 2025, including decoupling of Airbus business at Spirit Production rate increases on B737-MAX when FAA oversight allows Production rate increases on B787 as supply chain constraints are overcome Production rate increases on A350, lead by -1000 variant (rate 1 to rate 3), total A350 rate from rate 6 to rate 9 © Velocity Composites plc - 2025 | www.velocity-composites.com 5 Business Progress US OPERATIONS At HY24, successfully completed the First Article Inspection (FAI) requirements needed from US customer but delayed completion of the FAI process between customer and OEM Now working directly with OEM to complete necessary work in Q1 FY25, allowing the US site to fully discharge the existing contracted business Quality and delivery performance in line with UK sites New business development continuing and expected to be supported by: Resolution of Boeing/Spirit FAA oversight and merger, and production rate increases in civil aerospace Continued progress with defence customers EUROPEAN OPERATIONS New pricing agreements in place with existing customers with annual reviews for inflation Implementation of Odoo based VRP update completing in 2025 New business activities focused around existing customers in both UK and mainland Europe Ramp up of A350 programme (particularly -1000 variant) expected to increase existing business © Velocity Composites plc - 2025 | www.velocity-composites.com 6 Summary Income Statement FY24 FY23 £000 £000 Revenue 23,006 16,411 Cost of sales (17,045) (13,325) Gross profit 5,961 3,086 Administrative costs (6,892) (5,903) Operating loss (931) (2,817) Finance expense (413) (326) Loss before tax (1,344) (3,143) Adjusted EBITDA* 374 (1,606) Earnings before interest, tax, depreciation, amortisation and adjusted for share-based payments. Group revenue for FY24 increased 40.2% as sales from our US site ramped through the year Gross profit improved as a result of the increased sales revenue and higher gross margin percentage of 25.9% (FY23: 18.8%) that was achieved through a better sales mix, inflation adjustments and improved operational efficiencies Administrative expenses increased as a result of incremental costs associated with the US operations Adjusted EBITDA profit achieved for the first time since the Covid-19 pandemic © Velocity Composites plc - 2025 | www.velocity-composites.com 7 Summary Statement of Financial Position FY24 FY23 £000 £000 Non-current assets 4,667 5,114 Inventories 2,500 2,743 Trade and other receivables 3,977 3,667 Cash and cash equivalents 1,663 3,178 Current assets 8,140 9,588 Loans 503 503 Trade and other payables 3,933 4,587 Obligations under finance leases 561 487 Current liabilities 4,997 5,577 Non current liabilities 1,944 2,557 Net assets 5,866 6,568 Non-current assets reduced through normal depreciation and amortisation and a quieter year in terms of capital expenditure Inventory management continues to be a key focus area and we were achieved a reduction even with the 40% business growth Trade receivables increased as a result of higher sales but we reduce debtor days to 53 days (FY23: 71 days) Trade payables reduced as part of the improvement in inventory turns Non-current liabilities include CBILs that reduced to £0.5m and obligations under finance leases that saw a net reduction of £0.3m © Velocity Composites plc - 2025 | www.velocity-composites.com 8 Summary Statement of Cash Flows FY24 FY23 £000 £000 Operating cash in/(out)flow 345 (1,730) Movements in working capital (373) (102) Cash in/(out)flow from operations (28) (1,832) Tax received 398 - Net cash in/(out)flow from operations 370 (1,832) Cash used in investing activities (584) (2,122) Cash used in financing activities (1,412) 4,788 (Decrease)/increase in cash (1,626) 834 Cash at 1 November 3,178 2,344 Currency exchange movement 111 - Cash at 31 October 1,663 3,178 Net cash flow generated from operations in year Investing activities were: Purchases of PP&E of £212k, principally establishing a 4th cutting cell in the US Capitalisation of development costs of £372k Financing costs included repayment of £1.0m (FY23: £1.0m) of CBIL and finance leases Overall net cash position at 31 October was: FY24 FY23 £000 £000 Cash 1,663 3,178 CBIL loan (971) (1,473) Invoice discounting facility utilisation - (68) Net cash 692 1,637 © Velocity Composites plc - 2025 | www.velocity-composites.com 9 FY25 Outlook A350 programme production rates are expected to increase significantly as the OEM strives to fulfil its order backlog. This is the largest programme in the UK to which Velocity is a supplier Final contracted programme from previously announced agreement expected to reach sustained production at US site in H1 FY25 Business development activities focused on defence sector Anticipated near-term growth supports the Board's key targets: 25% plus gross margin 10% adjusted EBITDA* margin 25% return on capital The Board is confident of delivering another year of strong growth in FY25 © Velocity Composites Plc - 2025 © Velocity Composites plc - 2025 | www.velocity-composites.com 10 Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

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